Kiwi Slides After CPI Undershoots Expectations

New Zealand's Q1 inflation data shot down the kiwi dollar, sending NZD/USD ~30 pips lower in a single nosedive.

• Headline inflation accelerated to a 32-year high of +6.9% Y/Y in the three months through March from +5.9% prior, missing consensus forecast of +7.1%.
  • Stats NZ: "The main driver for the 6.9 percent annual inflation to the March 2022 quarter was the housing and household utilities group, influenced by rising prices for construction and rentals for housing."
• Quarterly inflation accelerated to +1.8% Q/Q from +1.4%, but also undershot expectations, as consensus was looking for +2.0%.
  • StatsNZ: "The consumers price index rose 1.8 percent in the March 2022 quarter compared with the December 2021 quarter, mainly driven by higher petrol prices."
• The withdrawal of hawkish RBNZ bets that followed the release of CPI data has been negligible. Market pricing regarding the next MPC meet is pretty much unchanged.
• NZD/USD last changes hands at $0.6778, down 29 pips on the day, after bottoming out at $0.6767.
• As flagged earlier, the RBNZ will publish sectoral factor model inflation later in the day. Worth noting that non-tradable inflation reached +6.0% Y/Y, the highest since the series began in June 2000.